Uncertainty produces high volatility, and so it is with these two funds.
EFA is a wider play, with about half of its holding sin Europe and the rest in developed-world in other regions. EWG covers blue chip companies in Germany, continental Europe's most robust economy.
One possible problem with the two is wide bid/ask spreads on front-month at-the-money calls, my benchmark option for judging the spread.
EFA's bid/ask spread is 14.0%, and EWG's, 14.3%. I prefer single-digit spreads but I have on occasion allowed for higher.
Since this is an event play I would treat it like an earnings announcement, where I go in the last trading day before the event.
In this case that would be next week, on Wednesday June 22.
So I won't do a full analysis today but shall wait, making a note to put these two symbols on the Prospects list for June 22.
I plan no full analyses today and shall enter no new positions.
-- Tim Bovee, Portland, Oregon, June 13, 2016
by Matt Hall
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